Securities Mediation - Arbitration, Securities & Investment Fraud Lawyer

What Is Mediation And How Does Mediation Differ From Arbitration?

Mediation is an informal, voluntary process in which an impartial person, trained in facilitation and negotiation techniques, helps the parties reach a mutually acceptable resolution. What distinguishes mediation from other forms of dispute resolution-principally, arbitration and litigation-is that the mediator does not impose a solution but rather works with the parties to create their own solution. Mediated solutions often include relief not available in arbitration or litigation.

Mediation is flexible and creative. The actual process varies from case to case depending largely on the parties' needs and the mediator's style. Usually, the parties meet to discuss the issues face-to-face. The mediator helps the discussions remain focused and productive. Then, the mediator may hold private caucuses with each party separately, and will carry messages-clarifications, questions, proposals, offers, and counter offers-back and forth between them. The mediator uses the private caucus and other techniques to facilitate the negotiation.

Mediation is non-binding. The emphasis is on fashioning a solution satisfactory to all. However, if the parties cannot negotiate an acceptable settlement, they may still benefit from the process by narrowing the issues to be arbitrated or litigated.

The Mediator's Role

The mediator assists and guides the parties toward their own solution by helping them to define the important issues and understand each other's interests. The mediator focuses each side on the crucial factors necessary for settlement and on the consequences of not settling. The mediator does not decide the outcome of the case and cannot compel the parties to settle.

The mediator can defuse hostile attitudes and remedy miscommunications. The mediator is a mirror of reality, who can help soften or eliminate extreme negotiating positions. Through the mediator, parties assess weaknesses in their own case and recognize potential strengths of the other side. The parties can more clearly view matters previously distorted by anger and emotion.

NASD mediators are knowledgeable in the subject matter of the controversies. Within the privacy of the caucus, mediators can help each party analyze the strengths and weaknesses of its complete case. Most significantly, the mediator can explore creative and innovative solutions that the parties-caught up in adversarial negotiations-might never contemplate.

Who Are The Mediators?

NASD mediators are independent neutrals, not employees of NASD Dispute Resolution. They are carefully screened and represent a cross-section of people, diverse in culture, profession, and background. Many have extensive knowledge of securities law and industry practices.

Many NASD mediators are also arbitrators with training and experience in resolving securities matters. However, the skills required for each role are unique, and the two neutral pools are separate and distinct. NASD rules prohibit an individual from serving as both a mediator and arbitrator on the same case.

NASD Dispute Resolution staff and our Mediation Committee vigorously scrutinize each applicant against demanding qualification criteria. To qualify as an NASD mediator, an individual must submit four letters of reference from parties who have observed the applicant's mediation technique. Formal mediator training and experience as a mediator are additional requirements of service.

All parties must agree to the selection before a mediator is assigned to a case. Either side can stop the mediation process if dissatisfied with the mediator

Benefits Of Mediation

· Control- Mediation belongs to the parties. The disputing parties control the process, scheduling, costs, and outcome of the dispute.

· Less Adversarial- The mediation process is informal. It is less confrontational than arbitration or litigation.

· Preserves Options- Parties can enter into mediation without jeopardizing their option to arbitrate or litigate.

· Swift Settlement- Most mediations are successfully concluded in a single day. Since mediation can be scheduled soon after a dispute arises, parties reach settlement much earlier than in arbitration or litigation. Many mediations conclude before a formal arbitration claim is filed.

· Lower Cost - Mediation usually entails lower legal and preparatory costs, there is minimal interruption of business or personal life, lost productivity is kept to a minimum, and the fees and expenses of mediation are modest.

· Preservation Of Business Relationships- By reaching an early resolution with minimal financial or other strain on either party, the chances for preserving business relationships are greatly enhanced.

· Protects Privacy- Mediation offers greater confidentiality than arbitration.

· Creative Solutions- Mediators help the parties craft creative solutions.

· Low Risk- Settlement potential is high. The case proceeds quickly. The cost is modest and there are benefits even if a settlement is not reached.

How Successful Is Mediation?

Historically, parties settle most business disputes submitted to mediation. Mediation experts attribute this to the parties' control over the process, costs, and outcome. The parties approach the process with confidence, leading to successful resolutions. Approximately 80 percent of the cases in the NASD Mediation Program settle within a few weeks to a few months of the parties' formal agreement to mediate.

Mediation is valuable even when the parties do not reach full settlement. Sometimes parts of a dispute are resolved in mediation, leaving fewer or less extreme differences to be resolved in arbitration or litigation. Gaining agreement on collateral issues can translate into significant savings of time and money for everyone involved.

The mediation process improves communications, narrows outstanding issues, defuses emotions, and defines areas of agreement. Through the mediation process, the parties and their representatives also learn where to focus their energies should arbitration or litigation become necessary. Therefore the parties' future dispute resolution efforts become more efficient.

Negotiation Of Settlement

Throughout the mediation process, the mediator will help the parties negotiate effectively. Efforts to reach a settlement through mediation will continue until: (a) the parties agree to a resolution and execute a written settlement; (b) the parties conclude that further efforts to mediate the dispute would be futile and declare the negotiations at an impasse; or (c) any party or the mediator withdraws from the mediation process for any reason.

When Settlement Is Not Reached

Most parties express satisfaction with the mediation process even when they do not reach full settlement. Proper preparation for the mediation session readies the parties for the arbitration. During the mediation process the parties and their representatives gain a better understanding of their case. This, in turn, helps them focus on the necessary next steps. Further, the mediation process moves very quickly and does not delay the ultimate resolution. Finally, by the end of a single day of mediation, the improved lines of communication often place the parties in a better position to settle the case at a later stage.

Source: NASD Alternative Dispute Resolution: Mediation, an Alternative Path

http://www.nasdadr.com/med_alt_path.asp